Returning from abroad

by **roselynn** on Fri Sep 25, 2009 4:50 pm

Hi, I have been living in Thailand for 6 years and over the past 4 years have spent less than 90 days in UK per year. I started a small business( I am a jewellery designer) selling my jewellery when I was home this summer (June to Sept), opened a business acc with RBS and paid in £7000 over the 4 months.
I intend coming home again in March 2010 and stay through to Dec 2010 to try and build the business and have been told I could have a tax free period as I am returning from over 4 years outside the EU.
Can anyone tell me if this is true....should I come back in April rather than March......any other information which may be relevant to my situation.
Thank you in advance

by **maths** on Fri Sep 25, 2009 5:05 pm

A business run in the UK by an individual is in principle subject to UK income tax irrespective of the residence status of the individual; in this sense there is no "tax free period" as you suggest.

Other things being equal, a return on or after 6th April 2010 is likely to be preferable to a return in March 2010.

by **Peter D** on Fri Sep 25, 2009 5:13 pm

It sounds as though you have already started the business. Are you registered with HMRC as self employed. I'm not sure where you got your advice from but it is off the mark. Regards Peter

by **roselynn** on Sun Sep 27, 2009 3:32 pm

Peter D wrote:It sounds as though you have already started the business. Are you registered with HMRC as self employed. I'm not sure where you got your advice from but it is off the mark. Regards Peter

Thanks for the info, so basically as soon as I come back in march and start earning I am liable to pay tax o. my earnings....how much can I earn as my tax free allowance....what rate will I pay....sorry I know this is basic stuff but I really do not have a clue but do have a good product which does sell/

by **RAL** on Sun Sep 27, 2009 3:47 pm

roselynn wrote:Thanks for the info, so basically as soon as I come back in march and start earning I am liable to pay tax o. my earnings....how much can I earn as my tax free allowance....what rate will I pay....sorry I know this is basic stuff but I really do not have a clue but do have a good product which does sell/

What is your trading style/vehicle? Sole trading, limited compnay?

by **roselynn** on Mon Sep 28, 2009 7:45 am

RAL wrote:
roselynn wrote:Thanks for the info, so basically as soon as I come back in march and start earning I am liable to pay tax o. my earnings....how much can I earn as my tax free allowance....what rate will I pay....sorry I know this is basic stuff but I really do not have a clue but do have a good product which does sell/

What is your trading style/vehicle? Sole trading, limited compnay?

Sole trading so far, small business but with a lot of room for growth.

by **RAL** on Mon Sep 28, 2009 10:06 am

roselynn wrote:Sole trading so far, small business but with a lot of room for growth.

As you are trading as a sole trader, you have to inform HMRC within 3 months that you are a self employed. If you failed to notify HMRC within time limit there is a penalty of £100.00 for the failure.

You also need to notify HMRC within 6 months of the end of the tax year in which you have a chargeable income. For example if you earn any income
during 2009-2010, you have to notify HMRC by 05/10/2010 and request self assessment form. If you failed to notify by 5th Oct then, there is a penalty of upto 100% of tax owed by the trader, which is unpaid by the following 31 January.

* You need to pay Class 2, for current year 2009-2010 is £2.40 per week. However, if there is a small earnings exception which is £5,075, if your earning is less than £5,075, then you can apply for the exemption. Please remember that this may affect your entitlement to state benefits and or pension.

* You also have to pay Class 4 NIC on your "profit", any profit you make between £5715 and £43,875, you pay 8% and above this profit you pay 1%.

* You also have to pay the Income tax on the profit you make. Either at 20% or 40% rate. Personal allowance is £6,475 for current year. Thereafter for next £37,400 taxed at 20% and over that amount is taxed at 40%
* You need to keep records of your income, sales invoices, purchase invoices and expenses.

For tax year 2009/10
You need to file your tax return by 31/10/10 for paper return and if you want HMRC to calculate your tax or by 31/01/11 for Internet filing. You have to pay tax due by 31/01/11.

Hope this helps. But I do suggest to seek professional advice.